The Australian Competition and Consumer Commission has authorised an agreement between members of an automatic teller machine sub-network not to charge each others cardholders a fee for transactions at ATMs owned by members.
Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Trade Practices Act 1974. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.
Reforms to Australia's ATM system, introduced by the Reserve Bank of Australia in conjunction with the banking industry on 3 March 2009, mean that customers can be charged directly by ATM operators for withdrawals. Most banks do not charge their own cardholders for withdrawals.
The reforms allow sub-networks to operate where financial institutions continue to charge each other for their cardholders' transactions, rather than charging the cardholder directly. These sub-networks address concerns that under direct charging smaller financial institutions will be at a competitive disadvantage as they cannot offer customers direct fee-free transactions at as many ATMs as the big banks.
The ACCC has authorised an agreement between participants in a Feesmart branded sub-network not to charge each others' customers fees for ATM transactions.
Instead of charging the cardholder a direct fee, Feesmart members will continue to charge each other a fee for ATM transactions undertaken by their cardholders. Each will independently decide whether to pass this fee on to its cardholders.
"The proposed arrangement will assist in ensuring that Feesmart members are not at a competitive disadvantage to the big banks as a result of reforms to the ATM system," Acting ACCC Chairman, Mr Peter Kell, said.
The arrangements have been operating since the reforms to the ATM system were introduced in March under an interim authorisation granted by the ACCC.
The ACCC's determination will be available from the ACCC website by following the Public registers and Authorisations and notifications registers links.
The current Feesmart members are Cashcard and the Bank of China (Australia).